Discussion On Internal Audit Of City Commercial Banks

Internal audit is the symmetry of "external audit".Audits conducted by full-time auditors of various departments and units.The aim is to help managers of departments and units to implement the most effective management.Internal audit and external audit cooperate and complement each other,which is a major feature of modern audit.A sound internal audit system can provide reliable information for external audit and reduce the workload of external audit.In China,internal audit is not only an important part of the internal economic management of departments and units,but also the basis of national audit which is included in the audit supervision system.Internal audit has changed from traditional financial audit to management audit,business audit,performance audit and consulting business.In this process,the importance and necessity of internal audit has become increasingly prominent,the field has been broadened,the strength has been strengthened,the function has been improved,and the status and role has become more obvious.Commercial banks,as one of the main pillars of the financial industry,have always been known for their strict internal control and leading risk management.Its internal audit is also ahead of most industries.After decades of development,commercial banks have established an internal audit team with sound system,perfect organization and advanced means.The advanced experience of internal audit in commercial banks has also become a model for other industries to learn.In the report of the Nineteenth National Congress of the Communist Party of China,General Secretary Xi Jinping pointed out that "deepening the reform of financial system and enhancing the economic capacity of financial service entities".This has pointed out the direction for the financial construction of socialist market economy with Chinese characteristics in the new era.This is not only an opportunity for GZ Bank,a city commercial bank located in the central part of China,but also a huge pressure of competition from the same industry and supervision from relevant departments.Under the macro-political and economic background of our country,GZ Bank not only faces the operational risks brought by its own business development and scale expansion,but also the risks brought by the changes of the overall economic environment and the inherent risks in the financial market,which puts forward stricter requirements for GZ Bank.It has strong risk control ability and maintains stable and sustainable development.Sound internal control is the basis of establishing a good riskmanagement system.Internal audit is the last and most critical link of internal control,and plays a protective role in risk management and internal control.Therefore,it is of great significance to improve the internal audit work of GZ Bank for its development.GZ Bank,founded on January 18,2001,is a local city commercial bank.At present,the bank has 118 branches under its jurisdiction,basically achieving full coverage in Jiangxi Province.There are financial market department and asset management department in Beijing,financial industry department in Shanghai,science and technology research and development and Internet financial center in Shenzhen,and characteristic foreign exchange business organization in Xiamen Free Trade Zone.The development pattern of business chain has been basically established.The total assets and liabilities of the whole bank have both leaped to the level of 100 billion yuan.By the end of 2017,the total assets of GZ Bank were 121.7 billion yuan,the deposits were 83.6 billion yuan and the loan balance was 51.3 billion yuan.This paper takes GZ Bank as the research object.Firstly,by using the methods of literature research and case analysis,through collecting literature and collating and analyzing it,interviewing the internal auditors,it expounds the theoretical basis of internal audit of city commercial banks,and describes it from the definition,content,objectives and procedures of internal audit respectively.The particularity of internal audit object,the requirement of auditor's professional ability and the characteristics of on-site inspection as audit means of city commercial banks are summarized.The significance of internal audit of city commercial banks is summarized,including the advantages of preventing and controlling risks,standardizing financial management,improving internal control and strengthening supervision of city commercial banks' managers.Secondly,using case study method,this paper expounds the basic situation of internal audit of GZ Bank from the aspects of internal audit organization construction,internal audit system construction and internal audit implementation.It finds that internal audit of GZ Bank has strong relevance between the subject and object of internal audit,too much attention to the direction of supervision department,backward internal audit methods and internal audit.The feedback effect of accounting results is weak and so on.In order to solve these problems,this paper conducts in-depth research,argumentation and analysis,and finds out the reasons,which mainly include insufficient independence of internal auditors,outdated internal auditing concept,insufficient information construction of internal auditing,and no direct impact of internal auditing results on auditing objects.Finally,four suggestions are putforward: first,strengthening internal auditors Business level,strengthen the independence of internal auditors;second,change the traditional concept of internal audit;third,introduce new audit methods;fourth,establish a sound internal audit results feedback mechanism.Through the analysis of the problems existing in the internal audit of GZ Bank,this paper puts forward specific suggestions,hoping to help GZ Bank improve its internal audit level,better improve its risk management ability and corporate governance level,and make it sustainable and rapid development.In addition,this study also provides specific case reference for the study of internal audit of urban commercial banks.